Turkey Property Investment Recommended by GPG and Me

The well respected Global Property Guide publication has given a glowing recommendation for investment in Turkish property, particularly Istanbul.

According to the firm's research for its mid-year investment recommendations, yields on Turkish property in Istanbul are currently averaging 5.48%, which is higher than average yields in Italy (5.04%), France (3.85%), Spain (3.81%) and Portugal (3.63%).

These yields, as with most -- if not all -- of the GPG rental yield figures is based on residential rentals, which means they do not give a clear indication as to the kind of yields a holiday property might make, which can often by higher than residential yields depending on a number of factors.

This is unfortunate, because most overseas buyers of Turkish property are currently aiming at holiday lets, and there have been several reports of those buyers earning yields of 6% net.

Basically, yields on holiday property in Turkey will tent to be higher, because property in the touristic areas tends to be cheaper than that found in Istanbul, while rental rates on holiday lets tend to be higher, which can actually be higher than residential rents in Istanbul or the same depending on the property and exact locations in question.

Given these truths it is only a matter of how much paying occupancy the holiday home owners can achieve, which then depends on the amount of time they want to spend in the property.

The best strategy for holiday home investors in Turkish property, like those anywhere else in the world is to rent out the property for the entire season and use it during low season. This is a problem for some owners who don't do sufficient research and subsequently find out that the area they have bought in is completely closed off during low season, with not even so much as a shop to buy essentials like milk.

This is in fact one of the reasons why Turkey is currently seeing its popularity with this type of investor soar: because most buyers are currently doing a lot of research, they are finding out that most of Turkey's touristic areas are open all-year round.

Bright Signs for Overseas Property in 2010: But What About the Second Bite?

There is no doubt about it: as of the end of 2009 and for at least the first quarter of this year, the fear over the depth the financial crisis could plumb has subsided and anyone who has not been put in financial straits during the last 2/3 years is making plans and taking actions as if things are completely back to normal.

Some people are shouting about a second bite, including me in some areas, but I just wanted to explore the possibility that people going back to normal as they are could feed economies sufficiently enough to avoid the dreaded second bite as the stimulus rugs are pulled out from below us.

Okay, firstly there was a report of massive traffic increases to the prominent UK portals: traffic up 25% to Rightmove Overseas, 32% to the Move Channel and 38% Property-Abroad.com, all in the first seven days of the year. Of course there is the possibility that it was as much to do with the freak weather giving people more time to browse, but one thing about the freak weather is that is will have also increased the inclination to browse for a home in the sun.

Now, we have 133% increase in the sales of Miami condos. You will hear a lot of over 100% rises in the first quarter of this year, but this one holds weight because it gave figures. Condo Vultures research showed that 1655 condos were sold in Miami in the "latter part" of the year, compared to only 711 in the first 6 months.

HolidayLettings.co.uk, Rightmove's sister site has now reported an increase in traffic of 55% as over 1 million people visit the site in the first ten days of the year.

Yes, again this can be put down to the winter blues as Britain experienced freak weather, but I was here during the freak weather, and so was all my family and none of them were on holiday lettings booking trips or looking into buying property overseas on Rightmove.

The fear over the second bite comes from the fact that, at some point, probably within the next 4 months central banks, including the bank of England will start to pull back from their stimulus. This will lead to rising interest rates and falling liquidity. It will also mean more job losses as the government starts paying for the stimulus.

However, everyone knows this is going to happen. The people who work in the government departments likely to be affected by the cutbacks know that they work in the departments likely to be affected by the cutbacks. Therefore it is fairly safe to assume that those currently doing the browsing are able to spend in relative security.

Of course people will get caught out, but no more than normal. And of course there will be people browsing for the sake of browsing, but also, no more than normal.

I think that this current surge of activity is genuinely a very bright sign for the overseas property and tourism industries in 2010.

2010 and International Property: Turning Rebound into Recovery... Starring Supply & Demand

2010 is shaping up as the year when things really get moving again in the world of overseas property. 2009 will be known in history as the year the rebound started, and 2010 will determine whether or not the rebound turns into a full scale recovery.

In terms of a property market recovery this looks like being determined by 2 main factors, supply and demand. Before you slap me for stating the obvious, what I mean is: whether demand will continue to rise as government and financial stimuli are removed, and whether or not construction firms can uncurl themselves from the protective ball they rolled into quickly enough to prevent the recovery from stalling.

Sure, this is not the case in all markets; Spain and Dubai are shouting out at me as completely different situations because they are struggling to see any real rises in demand, and have oversupply sufficient to last about 5 years unless sales accelerate rapidly. None the less, that is a pretty good model.

Turkey fits that model perfectly: new home sales in Turkey were 14% higher in the first nine months of this year than last year, and demand has continued to rise, meanwhile construction contracted by almost 20% this year. Now we must all watch and hope that construction can accelerate fast enough so that demand needn't stall on the way up.

Apart from some exceptions, Asia has the supply balance about right for the most part. Thailand is a good example: Thai property developers abandoned the international market early in the crisis, to concentrate on domestic demand, for which they ramped up their development plans; launching new projects throughout this year, so there should be plenty of supply there.

Malaysia however, is now looking at an oversupply problem as developers all (uncurl from their protective balls) come out of the blocks at the same time.

Montenegro could be the one to watch in 2010: when the international crisis came down, most of Montenegro's developers were locked in the country's lengthy planning stages, which meant they were able to simply hold off their plans, without having to cancel developments, or make any kind of announcement. In fact Montenegro has probably been the least talked about market in 2009, and the say no news is good news.

According to a conveyance I interviewed a while back for an article in Overseas Property Mall, many Montenegro developers were left holding land-banks, rather than those in Dubai holding half-finished developments and headaches. 2010 will be the year when all those plans are relaunched, and any that aren't will represent an abundance of cheap land for sale in Montenegro, for any new developers that want to enter the market. The only thing Montenegro will need to watch out for is over-supply, but with the country's lengthy planning phase that really shouldn't be a problem.

Dubai World Restructuring Won’t Affect Property Market – Yeah Right!

OMG I nearly chocked on my coffee for trying not to laugh at this statement: "[the Dubai World debt restructuring] will have no significance [on the real estate sector] because restructuring is a normal word."

The statement comes from one Abdul Majeed Ismail Al Fahim, chairman of Dubai Pearl, speaking to Arabian Business.

He is right; restructuring is a normal word, and one which has been used so much in the last 12 - 18 months that it has almost become white noise in the global-economic newsroom. So, if this had simply been a case of Dubai World "restructuring" its debt then yes, the negative effect may well have been minimal.

That is: if it hadn't been made public that Dubai World had been forced to ask its creditors to postpone its debts, before there was any talk of the word "restructuring". But there was, and because there was we analysts have been able to fill in the blanks and have done so in national newspapers from Arabia to Zimbabwe (excuse the potential for a slight exaggeration there).

The real story goes: state-owned Dubai World is financially incapable of honouring its debts, and the real financial powerhouse of the Emirates (A.K.A Dubai’s rich uncle) refused to bail it out any longer, so it was forced into its current situation. Now the world looks on to see how much of a lesson the rich uncle wants to teach its easily led nephew.

Because of the way the story unfolded this is almost certain to have a negative impact on the property market. After shedding almost 50% in less than a year, Dubai property prices rose 7% in the 3rd quarter according to Colliers international. But one of the market’s biggest potential obstacles was always going to be residual negativity about the crash.

This had obviously began to fade as prices started to rise, but the Dubai World fiasco is bound to set back international sentiment by reminding us all just how much money fell into the Dubai pit never to be seen again.

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Turkey Has Outgrown the Need for EU Membership [Opinion]

Turkey has outgrown the need for EU membership and become a world beating property investment destination while doing so, writes Liam Bailey.

There has been a lot of talk in the press this week about how Turkey -- frustrated by the EU process seemingly going in the wrong direction -- is turning to the east in the hope of expanding its global influence and economic growth potential. While reading these articles it suddenly occurred to me: Turkey has outgrown the need for EU membership -- it is going on fine without it.

What benefit would full EU membership have to Turkey's property investment package? The answer is: very little.

In the Eastern Bloc, EU membership brought about a substantial gain in the economies of several countries, by bringing about massive growth in tourism, exports and their services sectors.

Tourism to Turkey has grown massively in the last few years; hitting over 28million visitors last year. Even this year, during a global recession Turkish tourism has continued to grow massively.

The economy has taken a battering but that is hardly a criticism given the number of economies it shares a common recent history with. No one is saying that UK property is not a worthwhile investment just because its economy fell into recession - are they?

In fact it is the way the crisis has affected Turkey that make property in the country look like an even better investment.

Yes, the economy has contracted by over 5% this year. But the economy has not collapsed into a heap, and/or been forced to take its begging bowl to the International Monetary Fund in order to survive, as some other EU members and hopefuls have been: Hungary, Ukraine, Latvia, and Belarus. Even Russia is falling over itself trying to protect the rouble against a $33 barrel of oil.

Even Germany, Europe's largest economy is expected to have contracted by 9% this year. Meanwhile Turkey has been outside of IMF assistance since May this year, and Turkish Prime Minister Recep Tayyip Erdogan is resisting signing a new deal, because it would weaken his growing international prowess as a regional power.

Meanwhile in Turkey, like many EU countries and those around the world, economic prospects are beginning to improve. Everyone is picking themselves up and surveying the smoking rubble to see just how bad things got, and how bad things could have got.

The Turkish real estate industry grew by 2% in the two months ending October according to Turkish news agency Hurriyet. This, an acceleration on the 3% growth recorded in the previous 9 months.

This is mainly based on domestic demand, because of the low interest rates, but in terms of private buyers from overseas, there has never been a better time to buy Turkish property, especially if you're British.

While the pound is struggling to gain any real ground against the euro and US dollar -- largely because the Bank of England wants it to stay weak so UK companies can gain a better international export foothold -- the good old British currency is riding high against the Turkish lira.

In the last few weeks Turkish property has fluctuated between being 9% cheaper to British buyers than it was in April, and being 11% cheaper to British buyers. As the currencies currently lie Turkish property is almost 12% cheaper to British buyers than it was in April (based on a 1.00GBP/2.516TYR exchange rate at the time of writing.).

Forex company Moneycorp recently told Write About Property in a podcasted interview that the pound would be staying strong against the lira for the foreseeable future, but it is not an ever-lasting window of opportunity.

Nor is the record low borrowing rate in Turkey. It is a misconception that foreigners cannot get mortgages in Turkey. Yes, it is true that mortgages can only be obtained on completed properties. This rules out off plan purchases, but on completed properties, foreigners are just as able to secure finance as Turks.

The borrowing rate in Turkey has recently been cut by a further 25 basis points to the record low of 6.50%. This means that foreigners can pay off loans much quicker, reducing the necessary financial commitment, and putting a Turkish property purchase within reach of more people than ever before.

View Turkey property for sale with Azure Overseas today, including the new key-ready Casmark golf apartments on the Bodrum Peninsula priced from £16,500.

Is the American Housing Market Really in Recovery?

In the last few of months the amount of positive data about the American housing market has been increasing.

The trusted Case-Shiller index began recording price increases in Q2, and these were matched by reports of increasing demand, and in line with reports that the US economy was also on the road to recovery.

The US economy grew by 0.9% in the third quarter, but is the US housing market really on the fell of a V-shaped recovery, or is this simply a bounce?

It all started back in Q2... Case-Shiller ended months and months and months of falling prices across the board in August, when they reported that prices had only fallen in 5 out of the 20 states covered in the index. Prices had either risen or stayed the same in the other 15.

This is when reports began to circulate from various sources that the US housing market had stabilised and was on the road to recovery. Throughout July and August more positive data was revealed for June, US construction spending saw an unexpected rise of 0.3%, compared to a 0.8% fall the month before, sales increased by 11% on the month, and pending sales by 3%.

But at the same time, there were also countless news stories on the rising number of repossessions throughout August. Even now there are literally thousands of homes entering the repossession process every week, and many more struggling to avoid it. Unemployment also showed some signs of turning around, but has as yet failed to do so in any real way.

And the picture has remained pretty much the same since August: there have been many positive reports of increased and increasing sales, a lot of positive data on prices, while the problems of repossession and unemployment loom large, threatening to pull the rug out at any moment.

Bringing it back to today, a Wall Street Journal report reads:

Home sales have increased from the severely depressed levels of 2008. The inventory of unsold homes listed for sale also is down. Bidding wars are breaking out for foreclosed homes in the sorts of neighborhoods (near jobs and decent schools) that attract both first-time buyers and investors seeking rental properties.

But more than 6.7 million U.S. households with mortgages, or about 13%, are behind on their payments or are in the foreclosure process, according to the Mortgage Bankers Association. Eventually, many of them will lose those homes, sending more supply onto the market. Unemployment has continued to rise, and the housing market is unlikely to show a sustained recovery until job growth resumes.

The picture of the US housing market as a whole is very similar to that of the UK, but on a much larger scale: there are some positive signs; the people who can afford to buy in cash or get affordable finance, are taking advantage of the bargains and repossessed properties. Meanwhile continually rising repossessions and unemployment threaten to send prices back into freefall at any moment.

Some people have also suggested that it was only the government incentive package, which paid a percentage of a first time buyer's house purchase that was causing the positive data. That scheme terminates this month.

So, the answer to the question: is the US housing market recovering is a resounding maybe according to official data and mainstream sources.

In my personal opinion: what we have seen is not the beginning of the recovery proper, it has been a bounce caused by the government stimulus and improved sentiment. Repossessions and unemployment will begin to re-exert downward pressure on prices in the next 6 months. The proper recovery will only begin when unemployment begins to fall, and even then price growth will be subdued for 2-5 years as America get's back on its feet and the repossession problem is finally brought under control.

That said: there is always criticism of me and others for even reporting on UK house prices as a whole, when every region is different. And this is even more true in the US.

The same WSJ report tells us that house prices in Summit, N.J., known for good schools and an easy, 45-minute train commute to Manhattan, the median home price in September was up 1.2% from a year earlier, according to Otteau Valuation Group, an appraisal company. While in Atlantic City, N.J., which suffers from too much speculative building of condominiums and weak demand for vacation homes, the median price is down about 12% from a year ago.

I agree, it is slightly pointless to report countrywide prices if you look at it from that perspective, but the average US house price and whether it is rising or falling will always be a focus for global property pundits, especially now we have all witnessed the effect it can have on the global economy.

View America property for sale

UK Employment Data Turning Positive will Spark Rise in British Appetite for Overseas Property

Today the Office for National Statistics revealed the latest data on the UK labour market, and while it is a lot more positive than previous reports, overall it is still negative, as we can see from Sterling losing some ground to the Euro and the Dollar.

Positivity comes in the fact that 86,000 more people were in part-time employment in Q3 than in Q2. Unfortunately that is tempered by an 80,000 fall in the number of people in full time employment. The combination of the two gives a positive 6000 more people in employment in the July-September quarter than in the previous quarter. However, the number of unemployed people climbed 30,000 to 2.46 million.

While I said that the report was negative overall, which as you can see it is in terms of raw data, however, in terms of interpretation this can only be called a positive report. This is because the rise in unemployed people is a lot smaller than previous quarters, and it contains the words "increase" and "in the number of people in employment", in the same sentence. All previous reports this year have been a solid wall of negative data.

The fact that the number of people in part-time employment rose could be said to show that employers are beginning to test the waters of expansion by hiring part-time staff, although the report says it is simply people taking part-time jobs because they can't find full time ones.

Either way, like I said, this is the first labour market review to contain any positive data, and it confirms that the UK economy is passed its lowest point and on the road to recovery. How this relates to overseas property investment is simple.

Since the first UK economic indicators turned positive in April, demand for overseas property has been increasing as British buyers returned to their favourite foreign hotspots. This has primarily been well-off Brits, who weren't left in financial difficulty by the recession, but who were fearful of just how bad it could get; that they might become affected eventually. Now that the full effect can be measured more easily their confidence has returned.

However, many more potential buyers have been waiting for unemployment to run out of rocket fuel before they felt confident in the recovery. Now that the ONS has revealed clear data that suggests that point is upon us. It will likely mark further increases in demand for overseas property among British buyers.

This will be hindered by the fact that finance is still very restricted for property purchases abroad, just as it is in the UK. This is because, unlike the first group of returning buyers, those returning because fear for their job is subsiding are more likely to be looking for finance to make their purchase.

That said, while finance is hard to come by, it is not impossible, so there will be a rise in demand for overseas property from British buyers. This demand will continue to rise as unemployment falls, as mortgages get easier to obtain and as Sterling regains its former glory.

Overseas Property Industry: the Worst is Over - the Buyers are Back

Well, it certainly seems that the worst is over. I'm talking about the global financial meltdown that started in America first in late 2006, spreading throughout the world's developed economies like an unstoppable disease into 2007, and breaking down the immune systems of emerging markets, most of which ended up being affected sometime in 2008.

My regular readers will know I am somewhat of a pessimist that can spot a pundit talking up the market to create false optimism a mile away. That said: at the moment there is just too much positivity about to brush away, and, more importantly activity is increasing in the overseas property industry, people are buying again (in numbers).

If you are an overseas property agent, or anyone with a vested interest in the sales of overseas property (to British buyers), and you have survived this far, you can breathe a slight sigh of relief. However, we mustn't rest on our laurels; we must step up a gear and secure every possible sale we can while the going is good, in case things drop off again when the world's government's pull back on their stimulus spending.

The credit crunch, however has brought about changes that will not be reversed for sometime, if ever. No longer are people so quick to hand over their money because an agent tells them that the returns will be huge. People are eager now to do their own (due-diligence) to research the pros and cons of a development and region. Another change is that people are tending to look for cheap property abroad.

This is a good thing, because reports of people losing money because of fraudulent or incompetent developers do the whole industry damage.

Panama Economic Activity in June Up on Last Year

Economic activity in Panama was 0.31% higher in June 2009 than it was in June last year, prompting optimism from the government that it could mark the beginning of an overall return to growth in one of Latin America's best performing economies.

After two consecutive months of falling economic activity the June rise brought the decline in Panama's economy down to 0.5% for the first half of this year. This is compared to an 8.44% growth in Panama's economy in the same period of last year.

However, the fact that Panama's economy was so strong in the first half of last year, makes the 0.31% June increase on last year's performance even more poignant.

Panama has average 8% GDP growth in the last few years, and even now, during one of the worst global recessions the world has ever seen, the median forecast for Panama is a 3% growth in GDP for 2009.

I agree that a 3% growth is entirely possible, with potentially even a 4.5% growth over the fiscal year. If this is indeed the turning point in the Panamanian economy then I believe we will be looking at a v-shaped recession/recovery track, with a strong return to growth and a return to similar levels of growth seen in previous years in the 2010/11 fiscal year.

I believe this because Panama is currently like a magnet for investment because of the expansion of one of the most important waterways in the southern hemisphere, the Panama Canal, which cuts Central America in two to link the Pacific Ocean to the Caribbean Sea and Atlantic oceans.

The expansion, due to be completed in 2014 will triple the Canal's expansion and has the potential to increase Panama's GDP by at least 25% in subsequent years. This is making it a hotspot for overseas property investment, with property values also forecast to grow massively.

View property for sale in Panama

Economic Growth Potential Makes Panama a Hot Property Investment

I have just read an excellent article on Panama property investment, written by Liam Bailey for the Overseas Property World blog on Wordpress.

It explained the massive boost the Panama economy is going to receive even before the Panama Canal expansion is completed in 2014.

The Panama Canal is one of the biggest contributors to Panama's GDP, and it is a well known fact that the completion of its expansion will be a massive boost to Panama's economic growth, which had average 10% in the few years preceding 2008.

Bailey also pointed out that the Canal Expansion is already proving to be a boost to Panama's GDP, because in advance of the massive boost its completion will be, Panama has become a hot investment tip, for property and all sorts of other investments. In fact, this is the reason why Panama's economy is continuing to grow (3% this year and 4% next according to International Monetary Fund forecasts) throughout the global economic crisis according to Bailey.

But Panama's economy is to receive a massive boost before the expansion is completed. Bailey believes that when global economies, including the US begin to recover, use of the Canal and neighbouring Colon Free Trade Zone will increase GDP growth, as will tourism and exports, which Bailey believes will also start to grow post-crunch.

Increased imports into America as the economy recovers will benefit many South American markets as well as many more around the world, including Italy.

Bailey forgot to mention the fact that property prices are still comparatively low in Panama, increasing the potential of it as an investment.

Bulgaria Property to Attract New Wave of Overseas Investors

The credit crunch could prove be the best thing that ever happened to the Bulgaria property market, experts have stated.

The international economic downturn has given the Bulgaria property market the chance to reinvent itself and attract a new wave of overseas investor, according to overseas property specialists Azure Overseas, director Frank Crowley said:

"Bulgaria property became hot news with overseas investors between its transition and entry into the EU in 2002/04 and 2006/07, who bought property there on the strength of its potential for short-term gains. The trouble with this was that everyone started selling at the same time, and the market became saturated with similar properties in pockets around the popular areas.

"Now, during the global recession, practically every market that was popular with overseas investors has faced a similar fate as foreigners try to liquidate their assets as quickly as possible. The playing field has been levelled if you like, and Bulgaria has a chance to put forward its strengths of low cost property, great beaches, great ski-slopes and fantastic potential for capital growth over the mid-long term."